CCAAT/enhancer-binding protein-α (C/EBPα) is a basic leucine zipper protein that controls transcription of genes important for liver function, white adipose tissue development, and granulocyte differentiation. In addition to its function in controlling gene expression in differentiated tissues, C/EBPα is also associated with an antimitotic activity. We have previously demonstrated that C/EBPa interacts with p21, a cyclin-dependent kinase (CDK) inhibitor, and that C/EBPα inhibits proliferation when expressed in several different cell types (Timchenko, N. A., Harris, T. E., Wilde, M., Bilyeu, T. A., Burgess-Beusse, B. L., Finegold, M. J., and Darlington, G. J. (1997) Mol. Cell. Biol. 17, 7353-7361). Here we define the regions of C/EBPα required for interaction with p21 and demonstrate that CDK2 also interacts with C/EBPα. We show that C/EBPa can cooperate with p21 to inhibit CDK2 activity in vitro. The effect of C/EBPα on CDK2 activity requires the p21 and CDK2 interaction sites within C/EBPα. C/EBPα mutants incapable of inhibiting CDK2 activity in vitro do not inhibit proliferation in cultured cells. However, C/EBPa mutants defective in DNA binding inhibit proliferation as effectively as the wild-type protein. These findings show that C/EBPα-mediated growth arrest occurs through protein interactions and is independent of its transcriptional activity.